Wall Street closes week with gains despite Middle East tensions

After days of losses, Wall Street ended the week on a positive note. Inflation data in line with expectations makes a rate hike more likely.

A street sign on Wall Street, home of the New York Stock Exchange. Photo: dpa

New York. After four days of losses in a row, the US stock markets closed the week in positive territory. The main reason for this is falling oil prices, which are moving away from their multi-month highs.

The US standard value index Dow Jones closed one percent higher at 52,573 points.

The broader S&P 500 also gains almost one percent and is trading at 7,656 points.

The technology-heavy Nasdaq Composite gained one percent and is at 26,333 points.

The Nasdaq 100, a reflection of the 100 non-financial companies with the highest market capitalization, closed 0.9 percent higher at 29,368 points.

The gains are likely to be primarily due to the significantly lower energy prices. The price for a barrel of Brent for delivery in November had risen to up to $110 during the night, but is now only around $105. The movement was similar for the US crude oil counterpart WTI, which was around $100 in the evening.

The situation in the Middle East remains tense. The Houthi militia, allied with the Iranian regime, has controlled Yemen's entire Red Sea coast since Friday, exacerbating the risk for oil and gas tankers trying to pass through the Bab al-Mandab Strait. This also endangers the alternative routes for oil from the Gulf states, which run through Saudi ports on the Red Sea.

Inflation

US inflation remains at 3.4 percent – an interest rate increase is considered almost certain

However, the inflation figures for August, which were in line with expectations, had no negative effect. Given the August inflation rate of 3.4 percent, it is now almost a foregone conclusion on the markets that the US Federal Reserve will raise interest rates next week.

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